Pepkor eyes 2027 for the rollout of a new South African bank

Pepkor Holdings hired Merwe Scholtz to lead a new banking push as Africa’s largest clothing and mobile phone retailer prepares to launch an independent lender as early as next year.

The Cape Town-based company already sells smartphones and extends credit to customers, and said in an investor presentation Tuesday that adding deposits would complete a full-service banking offering — confirming earlier Bloomberg reporting that it was weighing such a move.

With about a sixth of South Africans unbanked or underserved, Pepkor is following retailers, including Shoprite Holdings, in using customer data to expand into financial services, while targeting shoppers already transacting in-store but not fully captured by traditional banks.

Pepkor plans to use its more than 6 500 stores to support the digital bank, with build costs of less than R1 billion ($58 million) and a return-on-equity target exceeding 30% by the fifth year. The group said its model combines retail footfall, device distribution and financial services on a single platform — a mix it sees as unique in a market where banks dominate income and risk segmentation, retailers drive traffic and telecommunications firms control the device layer.

The strategy builds on significant existing activity across its business, including more than 2 million money transfers, over 22 million cash withdrawals and about 65 000 loans already processed.

Read: Pepkor rethinks Investec tie-up as it eyes solo bank startup

It is also aimed at lower-income consumers, Pepkor’s core customer base, who typically earn less than R15 000 a month. Among those earning below R8 000, 57% prefer paying bills through retailers compared with 36% via banks, the company said, underscoring the scope to shift more transactions onto its platform.

Pepkor received regulatory approval last year to establish a banking unit and has since acquired a financial-technology platform to support the expansion. An independent advisory board, already largely in place, will oversee the lender.

Read: Pepkor seeks money chief as top Africa clothes seller plans bank

In December, the retailer appointed former Investec Bank Chief Executive Officer Richard Wainwright as an independent non-executive director.

Pepkor’s fintech revenue rose 31% to R16.6 billion in the year through September, accounting for 17% of total sales.

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